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Luas operator incurred 'significant losses' due to Covid-19

Operating losses at Transdev Dublin Light Rail Ltd increased by 13% to €3.07m in 2020.
Operating losses at Transdev Dublin Light Rail Ltd increased by 13% to €3.07m in 2020.

The operator of Dublin's Luas light rail tram system has incurred "significant losses" as a result of the Covid-19 pandemic delaying the implementation of a transformation plan for the firm designed to cut costs.

That is according to new accounts for Transdev Dublin Light Rail Ltd which show that operating losses at the company increased by 13% to €3.07m in 2020.

In accounts only signed off on February 22nd this year, the directors state that "as a consequence of Covid-19, the company could not put in place the transformation plan originally set out in our bid proposal to significantly decrease the cost base".

They add that "this resulted in a cost increase compared to the revenue resulting in significant losses".

The accounts show that operating losses for 2020 increased as revenues rose by 37% from €43.48m to €59.47m.

The firm recorded a pre-tax loss of €3.22m after paying out €155,084 in interest costs.

In 2023, the Luas reported a 25% increase in passenger numbers to 48.2m - more than double the 19.2 million which travelled on the Luas during the Covid-19-hit 2020.

Providing an update on the company performance since 2020, the directors' report states that "the priority of the business between March 2020 and January 2022, was to maintain operational delivery despite the significant impacts of those (Covid-19) factors including staff absences, supply chain delays, restrictions on contractors, etc."

They state that following the easing of Covid-19 impacts in early 2022 "a business transformation plan was developed and launched to deliver the delayed integrations and improvements ensuring delivery of all performance obligations reducing performance deductions. The business transformation was delivered between March 2022 and the end of 2023 achieving the objectives originally set out".

The directors state that its Luas contract with the National Transport Authority and Transport Infrastructure Ireland (TII) commenced on December 1st 2019 and is scheduled to run until the end of November 2025 with an option for extension up to a further five years.

A spokeswoman for Transdev said today: "Transdev looks forward to the launch of the tender process for the new Luas Contract and will assess the proposed new contract once published."

On the impact of Covid-19, the directors state that due to the "unforeseen costs resulting from the Covid-19 pandemic", an agreement was reached with TII for the sole provision of relief to TransDev Light Rail (TDLR) in relation to the deductions applied during the period from March 2020 to May 2021.

Numbers employed by Transdev Light Rail during 2020 increased by 42% from 376 to 535 as numbers employed now include security and maintenance personnel.

This resulted in staff costs rising sharply from €20.59m to €28.7m. The 2020 loss takes account of non-cash depreciation costs of €432,937.

Pay to directors totalled €470,471 made up of €440,926 in remuneration and pension contributions of €29,545.

The firm recorded a post tax loss of €4.1m after incurring a corporation tax charge of €877,116.

At the end of December 2020, the firm had a shareholders’ deficit of €8.64m. The firm’s cash funds increased from €2.4m to €3.57m.

Reporting by Gordon Deegan